European Parliament approved €EU loan of 35 bln to Ukraine using Russian assets

The decision to provide Ukraine with the loan, as part of a G7 package totaling 45 billion euros and funded by profits from Russian assets, was supported by 518 votes in favor and 56 against. The approval followed several hours of debate.

The European Parliament has approved a €35 billion EU loan to Ukraine as part of a large G7 loan of about €45 billion (about $50 billion) that will be repaid using proceeds from frozen Russian assets, as it was confirmed by the EP’s press-service on the official website.

518 MPs supported the decision, while 56 voted against it. Before that, the debate lasted for several hours.

Russia, as an aggressor country, must pay – Metsola

“Ukraine continues to resist Russian aggression, with its brave citizens fighting not only for their own existence and freedom, but to defend democracy, human rights, freedom, and international law for all of us. The need for financial support is both immense and urgent. Russia must pay for attacking Ukrainians and brutally destroying the country’s infrastructure, cities, villages, and homes. The burden of rebuilding Ukraine will be shouldered by those responsible for its destruction, namely Russia,” the rapporteur on this issue Karin Karlsbro said in the European Parliament.

“With this vote, we are sending a powerful signal that we are using the proceeds of Russia’s frozen assets to support Ukraine and that Russia, as an aggressor country, must pay—and will pay,” said European Parliament President Roberta Metsola.

It is noted that the final amount that the EU will provide as a loan may be less, depending on what contributions other G7 countries will make.

EU governments endorsed the proposal

Earlier, EU governments endorsed the proposal, and the EU Council plans to adopt the regulation by written procedure after the European Parliament’s vote. The regulation will enter into force on the day after its publication in the Official Journal of the EU, according to the European Parliament’s report.

In September, the European Commission announced a €35 billion EU loan for Ukraine as part of a plan by G7 partners to issue loans of up to $50 billion (about €45 billion). Future revenues coming from the frozen Russian state assets would finance the loans.

The EU holds around €210 billion in assets from the Central Bank of the Russian Federation, which are under international sanctions due to Russia’s invasion of Ukraine. EU governments decided to set aside the profits from these assets and use them to support both military aid to Kyiv and reconstruction of Ukraine.

UK to contribute $3 billion, and US to provide up to $20 billion

On October 22, the United Kingdom officially announced its share of the G7 loan—almost $3 billion. As part of a joint $50 billion loan from the Group of Seven countries to Ukraine, London will contribute almost $3 billion, with repayment coming from the proceeds of Russian assets.

According to the latest media reports, the United States is ready to provide Ukraine with up to $20 billion under the G7 loan. It’s expected that Washington’s contribution would be less than originally planned, as the EU (due to Hungary’s opposition) failed to introduce a safeguard guaranteeing that Russian assets would remain frozen for at least three years.

G7 to keep frozen Russian assets after the end of the war in Ukraine

The Group of Seven nations plans to keep the frozen Russian sovereign assets even after the war in Ukraine ends. The Japanese newspaper Nikkei reported this, citing several G7 sources, including senior EU officials.

According to the publication, the G7 leaders will issue a statement on this issue this month. It will say that the sovereign assets of the Russian Federation will be frozen until it pays for the damage caused to Ukraine during the full-scale invasion.